The Stroz Friedberg Cyber Brief

A senior Obama administration on Friday confirmed reports from U.S. security agencies that the government did not see “any increased level of malicious cyberactivity aimed at disrupting our electoral process on Election Day,” and affirmed that the “elections were free and fair from a cybersecurity perspective.” The remarks came as some opponents of Donald Trump, including supporters of presidential candidates Jill Stein and Hillary Clinton, pushed for recounts in three states (Wisconsin, Michigan and Pennsylvania) where his margin of victory was slim.

However, U.S. agencies are still looking into the electoral effects of a broader Russian “information warfare” campaign in which bogus news about Clinton and about U.S.-Russia relations appeared intended to influence voters. An analysis by BuzzFeed found that top fake election news stories generated more total engagement on Facebook than top election stories from major news outlets. (NYT, WaPo, The Hill, BuzzFeed)

HACKERS

Headphones: Researchers in Israel have reportedly developed malware that converts headphones plugged into a computer into makeshift microphones that can secretly record conversations. In one test, the team found that they could record from as far as 20 feet away. (Wired)

U.S. Navy: The military service said that hackers gained access to sensitive information, including Social Security numbers, for 134,386 current and former U.S. sailors. A laptop used by a Hewlett Packard Enterprise Services employee working on a U.S. Navy contract was breached, the Navy said. (Reuters)

COURTS

Uber: The company will try to convince Europe's top court this week that it is a digital service and not a transport company. Legal analysts say the case could determine whether app-based startups like Uber should be exempt from stricter regulations faced by regular companies.(Reuters)

Russian Hacker: Both U.S. and Russian authorities have requested the extradition of a Russian arrested in Prague, the Czech government said. A federal grand jury in Oakland, CA, indicted Yevgeniy Nikulin in October for hacking LinkedIn, Dropbox, and Formspring. (Reuters)

High Schooler: Police in Pennsylvania arrested a high school senior, Michaela Gabriella, for launching a series of cyberattacks against more than a dozen local school districts, the Catholic diocese, and a local government. (AP)

Surveillance Powers: Civil liberties, digital rights, and watchdog groups are pushing President Obama to take a series of actions to weaken the surveillance state ahead of Trump’s inauguration. Those include releasing classified inspector general reports and the secret legal rationales behind the government’s spying efforts, which could help advocates challenge the next administration in court. (Politico)

DOD

ISIS: U.S. officials acknowledge that while the Islamic State retains a sophisticated social media arm that inspires terrorist attacks, U.S. forces have made progress in killing some of the militant group's top online propagandists. (NYT)

Bugs: The Defense Department became the first U.S. government agency to launch a policy enabling researchers to report bugs or flaws they discover in its websites without fear of prosecution. Individuals who report flaws will not receive bounties. The policy is aimed at those who come across bugs in the course of their jobs or through research. (WaPo)

PRIVATE SECTOR

Facebook: The social media network has quietly developed a censorship tool that could persuade China to allow it back into the world's second largest economy after a seven-year ban. Facebook has restricted content in other countries before, such as Pakistan, Russia, and Turkey. (NYT)

FireFox: Mozilla Corp. has introduced an extra-private version of its Firefox mobile browser that blocks all cookies, ad trackers, analytics trackers, and social trackers, and doesn’t store passwords, logins, or browsing history. (WSJ)

Tech Talent: Some critics are warning that tech companies are draining universities of the scientists responsible for cultivating the next generation of researchers and who contribute to solving pressing problems in fields ranging from astronomy to environmental science to artificial intelligence. (WSJ)

THE WORLD

Japan: The U.S. ally has plans to build the world's fastest supercomputer in a bid to arm Japanese manufacturers with a platform for research that could help them develop and improve driverless cars, robotics, and medical diagnostics. (Reuters)

China: The Asian giant became the first country to file a million patent applications in a single year, according to the World Intellectual Property Organization. Chinese innovators filed most of their 2015 applications in electrical engineering, followed by computer technology and semiconductors. (Reuters)

Philippines: An anti-money laundering body in the country has filed charges against five officials of RCBC bank and a former treasurer who "wilfully ignored" suspicious activity that led to tens of millions of dollars vanishing after a heist on Bangladesh's central bank. (Reuters)

MUST READS

How the War on Terror Turned Into a Fight About Intelligence:"Amid fears of the next assault, the intelligence agencies were called on to make the homeland safe. But when their conduct came to light later, in a less fearful world, they were condemned for their methods. The story of this whipsaw is a case study in how democratic, law-abiding societies struggle to govern bureaucracies that act behind a veil of secrecy. America has found the ensuing debate messy and bitter. The thing to remember, however, is that in other countries the debate barely took place at all," write editors of the Economist.

Hacked or Not, Audit This Election: “There’s no evidence that the outcome of the presidential election was shifted by compromised voting machines. But a statistical audit of electronic voting results in key states as a routine safeguard—not just an emergency measure—would be a surprisingly simple way to ease serious, lingering doubts about America’s much-maligned electoral security,” writes Andy Greenberg in Wired.

Watching the World Rot at Europe's Largest Tech Conference: “We are, most likely, in the middle of another soon-to-be-devastating tech bubble. For all the usual guff about dynamism and entrepreneurship, it’s clear that Web Summit isn’t really about showcasing new ideas or changing the way anyone does anything. The point is to attract buyouts or investment; this is how so much of the tech industry functions. (Social networks, for instance, generally make their money through investment or market flotation; they build up a vast userbase first, and defer the question of how to actually squeeze a profit out of them later.) The game isn’t to build anything that might last, but to secure just enough money to land unharmed when the crash finally happens. Very few of the ideas are actually new; they’re just bits of other, more successful companies cobbled together,” writes Sam Kriss in the Atlantic.

Fighting Botnets: “If we are to continue enjoying the convenience of [the Internet of Things] without being an accessory to cyber-attacks, new policies must be implemented which ban Botnet-for-hire organizations and mandate enhanced product security standards. To this end, the Department of Homeland Security should designate core internet backbone as critical infrastructure, require Internet Service Providers (ISPs) to detect and report Botnet for hires, and mandate stronger firmware access standards,” writes Marvin Phillips in The Hill.